Out of position players play badly
This will show itself in less effective passing, shooting and less effective marking against opponents. A rating 8 D,Defender might be only as effective as a 3 defender if you play him in attack.
Players out of position
Each player has a natural positions shown by G,D,M,A = Goalie, Defender, Midfield, Attacker. Some players can play in multiple positions DM, DA, MA. When you look at the team selection screen the players are positioned in the 4 zones for Goalie, Defenders, Midfielders and Attackers.
Whatever a player’s natural position is, if you play him out it, he will play less well. Note that a DA player for example, will play equally well in Defence or Attack, so dual position players are more versatile to use.